While there’s no immediate sign that Bitcoin’s most recent bull run will grind to a shuddering halt, last weekend saw another two days of turbulent price movements and ever diminishing gains.
Make no mistake; this was the catalyst for another glut of crypto futures liquidations through Saturday and Sunday, the majority of which took place on the popular crypto exchange Binance.
In this article, we’ll explore this trend in a little more detail, while asking what the future is likely to hold for crypto assets and futures liquidations.
While BTC first broke through above the $60,000 mark during quarter one, the asset has struggled to maintain this position for any concerted period of time.
This trend has been reinforced during the last 10 days, with a single Bitcoin token priced at $60.141.10 as recently as April 17th. Make no mistake; the asset has since embarked on a steady but marked decline, with prices falling as low as $49,059.50 by the close of trading on Sunday, April 25th.
This represented a decline of nearly 20% in scarcely eight days, while the price drop also triggered roughly 864,000 crypto futures liquidations over the course of the weekend alone.
According to data collated by The Block, this number set a new single-day record in the marketplace, while around 70% of these liquidations (613,000) took place on the Binance exchange.
So, although there’s no suggestion that BTC’s price is likely to slide even further in the days and weeks ahead, its inability to maintain a position above the $60,000 will be of concern for investors who are committed to the crypto asset’s long-term growth.
The good news is that BTC has immediately rebounded from its most recent setback, gaining nearly 10% in value to reach $54,017.20 by Monday, April 26th.
Also, the asset appears to have maintained a largely consistent price point as it continues to emerge as a relative safe haven asset, creating an appealing option even as the aforementioned bull run begins to lose momentum.
However, the constant fluctuations between the $60,000 and $50,000 marks represent particularly bad news for futures trading enthusiasts, with this investment vehicle requiring individuals to buy or sell a designated asset at a predetermined price and time.
Make no mistake; it’s the enduringly volatile nature of BTC that caused such widespread futures liquidations of late, and it remains increasingly difficult to profit through this type of investment in the existing marketplace.
Of course, this must be caveated by the fact that weekends have traditionally seen weak trading volumes for BTC, with this partially explaining the significant increase in value between Sunday and Monday this week.
Similarly, some forecasts still suggest that BTC could reach a staggering $400,000 by the end of 2021, so longer-term futures contracts could offer value over the course of the next six to eight months.